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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (42271)	11/4/2008 7:05:08 PM
From: carranza2	Read Replies (1) \| Respond to of 217773

My response to friend who seems to have been a bit astonished by my call that CAD will go to 1.35 from present .85 or so: I know my CAD target is wild. I think we may see it - and a lot of even more interesting stuff - take place in about 18-24 months. Firm believer in 'hard' stuff - gold, energy, commodities, strong currencies, etc. - and in the damage the borrowing needs of the US gov't will do to the dollar. The clownie is going to drop like Wiley E. Coyote drops into the abyss. What choice is there except to borrow? Scenario One: The Chinese and the rest of the Asians and other creditors have a strong interest in propping USD up. If they are going to be creditors for the amounts needed to finance the bailouts, the sheer size of the bonds that will be issued means that they'll demand higher rates in exchange for the privilege of watching their holdings diminish in value. Ergo, dollar drops, gold up, long bond rates up, strong currencies up, I prosper. vbg. Scenario Two: Creditors sicken of the dollar, will not take up huge amounts of new debt unless rates are so high as to be near extortionate. Possible global re-set takes place as creditors are willing to see holdings diminish in value so long as they get a new deal on reserve currency or global monetary basket or whatever. Ergo, dollar drops, gold up, long bond rates go up, strong currencies up, I prosper. vbg. These two outcomes are not Black Swans. As plain as can be, 75-90% guaranteed, IMO. As clear as the stuff Mr. X [genius investor, shorted subprime early and vigorously] was predicting when he got going. He who uses no capitals - or someone - discusses all this clearly, i.e., why was ABX so high when it was obvious it was going to hit the fan?